QUEENSLAND environmental campaigner Drew Hutton says he will go ahead with a threat to sue mining magnate Clive Palmer for defamation unless the billionaire apologises for accusing him of colluding with a US spy agency.

Mr Palmer launched the extraordinary attack on the Greens and environmentalists, naming Mr Hutton, during a media conference last week, alleging they were being funded by the US Central Intelligence Agency to undermine Australia's national economy.

He referred to Mr Hutton as a "tool of the government", saying a leaked plan by Greenpeace to thwart coal projects was proof of that.

Mr Hutton, the Lock the Gate Alliance president, threatened to sue Mr Palmer last week before deciding against it.

However, he told brisbanetimes.com.au this morning he had changed his mind after the mining magnate yesterday told media he had made the outlandish claims in order to distract negative attention away from the Liberal National Party during the Queensland election campaign.

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